The Grande General Store, Est.1948 Essay

1274 Words Mar 11th, 2013 6 Pages
The Grande General Store, EST. 1948

The purpose of this paper is to discuss Case #6 in the student text regarding The Grand General Store. The Grande General Store is a family owned business that has been in the family for several generations. The current owner-operators have grown children; however, the children are not interested in following in the family footsteps. Rocky and Anita Grande are getting up in age and are getting tired of running the store. With no one in line to run the store, they have decided to sell the business.
The Grande General store is located on the outer edges of Denver, Colorado. The store is well know and well respected amongst the local community. The current employees are also dedicated to the store and
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The Grande’s have done a good job of up keeping the buildings and equipment. They have an upgraded fleet of delivery trucks and forklifts. The store has a flavor of the original 1948 building exterior; however, the inside is modern with a mix of the original fixtures.
The income statement provided represents the financials for a five year reporting period - 1998 to 2002.
Income (Profit and Loss) Statement Summary: 1998 – 2002 (in 000s) 1998 1999 2000 2001 2002
Sales $1,100 $1,215 $1,500 $1,800 $2,200
Net Income $35 $66 $118 $181 $287

Net Cash Flow for Operations: 1998 – 2002 (in 000s)
Net Cash Flow $69 $84 $110 $187 $236

Balance Sheet Summary: January 1, 1998 – 2002 (in 000s) 1998 1999 2000 2001 2002
Cash $12 $19 $22 $23 $21
Owners Equity $686 $683 $647 $623 $613

The total current Assessed value is $850,000. During this time, Denver is on a growing trend and projected to continue. In the local area, new housing, new neighborhoods, new malls, and even schools are under way or in the planning stages. The Grande property is large and there are plenty of expansion options. The Grande’s have not come up with an asking price, but the local banks have offered to provide a 15-year note for a max of $624,000.
Question 1 Before deciding to purchase a business, in this case one must weigh the pros and cons of purchasing an existing business. If I were interested in hardware and construction, this would definitely be an

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